Workday Stock Testing Price Floor – Buy Now?
Workday (WDAY) stock should be on your watchlist. Here is why – it is currently trading in the support zone ($204.57 – $226.11), levels from which it has bounced meaningfully before. In the last 10 years, Workday stock received buying interest at this level 8 times and subsequently went on to generate 20.6% in average peak returns.
| Peak Return | Days to Peak Return | |
|---|---|---|
| 11/5/2020 | 24.9% | 99 |
| 3/5/2021 | 12.2% | 39 |
| 5/13/2021 | 10.7% | 47 |
| 7/19/2021 | 7.3% | 35 |
| 8/23/2021 | 24.0% | 86 |
| 11/8/2023 | 38.0% | 110 |
| 8/14/2024 | 25.6% | 117 |
| 4/23/2025 | 22.2% | 22 |
Yet, a support zone alone isn’t enough; rebounds are more likely when fundamentals, sentiment, and market conditions line up. How does that look for WDAY?
Likely Rebound from Support
Workday’s Q3 FY2026 surpassed revenue and EPS estimates, driven by 12.6% total revenue growth and expanding 28.5% non-GAAP operating margins. Healthy 17.6% 12-month subscription backlog growth, including AI-driven acquisitions, confirms demand. While management’s maintained full-year guidance suggests a tight environment, Workday’s market leadership, robust cash flow, and strategic AI integration provide a strong foundation. Most analysts hold ‘Buy’ ratings with average price targets offering substantial upside from current levels near its 52-week low. Industry trends favor cloud HCM and AI adoption.
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How Do WDAY Financials Look Right Now?
- Revenue Growth: 13.9% LTM and 16.5% last 3-year average.
- Cash Generation: Nearly 26.7% free cash flow margin and 8.7% operating margin LTM.
- Recent Revenue Shocks: The minimum annual revenue growth in the last 3 years for WDAY was 13.9%.
- Valuation: WDAY stock trades at a PE multiple of 98.5
| WDAY | S&P Median | |
|---|---|---|
| Sector | Information Technology | – |
| Industry | Application Software | – |
| PE Ratio | 98.5 | 23.6 |
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| LTM* Revenue Growth | 13.9% | 6.1% |
| 3Y Average Annual Revenue Growth | 16.5% | 5.4% |
| Min Annual Revenue Growth Last 3Y | 13.9% | 0.2% |
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| LTM* Operating Margin | 8.7% | 18.8% |
| 3Y Average Operating Margin | 4.1% | 18.2% |
| LTM* Free Cash Flow Margin | 26.7% | 13.5% |
*LTM: Last Twelve Months | For more details on WDAY fundamentals, read Buy or Sell WDAY Stock.
And What If The Support Breaks?
Workday isn’t immune to big dips either. It fell about 32% in the 2018 correction, nearly 43% during the Covid pandemic, and more than 55% in the recent inflation shock. Even with strong fundamentals and growth potential, the stock can still take serious hits when the market turns. Solid companies don’t guarantee smooth rides.
But the risk is not limited to major market crashes. Stocks fall even when markets are in good shape – think events like earnings, business updates, outlook changes. Read WDAY Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.
Still not sure about WDAY stock? Consider the portfolio approach.
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